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Economic impact of rebuilding helps Taum Sauk counties

When more than 1 billion gallons of water breached the Upper Taum Sauk Reservoir in December 2005, officials in Reynolds and Iron counties could see their money floating down the river.

No reservoir meant the Taum Sauk utility plant would close. That would mean its assessed valuation and tax rate would drop, Reynolds County revenues would plummet and the Lesterville school district would be in dire straits.

When the water ripped the soil from its path down Proffit Mountain, it pulverized the dirt into silt and deposited it in the Black River and the lower reservoir. The silt was so light it did not sink, which left the water brown and uninviting. The flood also destroyed much of Johnson’s Shut-Ins State Park. That meant tourists would no longer come to the park or the river to spend vacation time and money. Iron County’s income from tourism was bound to suffer.

Knowing what could have happened made Monday even better for Iron County Presiding Commissioner Terry Nichols and Reynolds County Commissioner Wayne Henson.

“We’ve seen a lot of jobs go to people in Reynolds County,” Henson said. “It’s been a huge asset for taxes.”

Nichols said when the breach occurred, the prospects were scary.

“When you lose a tool like Johnson’s Shut-Ins, you’re going to lose a lot of dollars,” he added. ‘Workers covered the shortfall.”

After the breach caused the shutdown of the facility, the Taum Sauk property fell into a lower tax category. Ameren agreed to continue paying its taxes at the rate it had been paying for the next two years. In 2006, county taxes for the Taum Sauk facility came to $732,709.96.  Lesterville School District’s share was $436,737.72, more than half its local taxes.

Without those funds, the district would have to make huge cuts, Superintendent Earlene Fox said at the time.

“What a devastation we were looking at if they didn’t rebuild,” Henson said.


Dave Fitzgerald, Taum Sauk plant manager, said the rebuild has helped the local economy more than anticipated.

“Southeast Missouri State University was hired to evaluate the economic impact,” he said. “It grossly underestimated what the economic stimulus would be.”

Construction began on the new dam in 2007. AmerenUE expects the $480 million project will be completed and ready to produce electricity by the end of May.

More than 600 union workers and about 100 managers work on the reservoir project. Fitzgerald said most employees live in the area, but wages are closer to St. Louis rates. Payroll is approximately $82 million per year, he estimated.

“We’ve created about a thousand jobs in the area when you consider suppliers and services that would not have had those jobs if we weren’t rebuilding,” Fitzgerald added. “We do business with more than 200 companies and suppliers.”

Ozarks Construction employees also have led troop support efforts, help with Project Graduation and support Relay for Life and local summer baseball programs, Fitzgerald explained.

Henson and Nichols both said their respective counties have maintained the same level of sales taxes over the past few years, despite the slipping economy.

Income from housing and services for workers who have moved to the area to work at Taum Sauk has helped both counties make up for any loss they incurred after the breach, the commissioners agreed.

Also in 2007, Johnson’s Shut-Ins reopened on a limited basis, bringing back some business from park visitors. Ameren also worked to clean the silt from the lower reservoir and the Black River to bring back campers and other tourists who enjoy the river each year.

Not everyone believes the problems have been offset by the construction. Some Iron County owners have complained as recently as this winter that their business was still down.

Nichols said that people who are complaining are not looking at the overall picture.

“They are just looking at the short term loss,” he said. “Johnson Shut-Ins is coming back better than before. When you look at the whole picture, tourism will gain.”

Fees and settlement

Reynolds County also benefited from a legal settlement between the state and Ameren and from fines AmerenUE had to pay for violations that led to the Dec. 14 breach.

The Federal Energy Regulatory Commission (FERC) ordered the utility company to pay $15 million in fines, $5 million of which had to be spent improving the area around Taum Sauk.

The $180 million settlement with the state in November 2007 provided money to Reynolds County, but left residents of both counties angry about the $18 million payment to the State of Missouri Parks Earnings Fund, which will be used to construct a trail extension to the Katy Trail from Windsor to Pleasant Hill, Mo.

“People are still very disappointed,” Nichols said. “We have some of the most beautiful parks here — maybe the most beautiful in the state. Why not put that money here?”

Gov. Jay Nixon, who negotiated the settlement as attorney general, announced in April that construction was ready to begin.

The settlement included $2.4 million in anticipated property taxes and other fees paid to Reynolds County, $3 million to a newly created Reynolds County Educational Enrichment Fund for scholarships to area high school graduates, $2 million to a Reynolds County School Fund, and $7 million to a tourism and economic development trust fund to be overseen by a seven-member board.

Paula Barr is a reporter for the Daily Journal and can be reached at 573-431-2010, ext. 172 or at

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